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Although hotel growth in Southern California hit a new high last year with more than 16,000,000 rooms built, the outlook for the future is not as bright as in previous years.
When Do Hotels In California Open
In all, nearly 112 hotels with 16,700 rooms were in various stages of construction by the end of 2018, up 28 percent from 2017, according to new data released Tuesday by Orange County-based Atlas Hospitality Group.
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Although the number of hotel rooms under construction in San Diego County, 458, was down slightly from 2017, growth in construction activity was stronger for Los Angeles and Orange counties. And last year, San Diego had the largest hotel in the state, the 400-room InterContinental.
More than 6,700 units were built in Los Angeles — a 26 percent increase — while Orange County saw 3,128 units under construction, an increase of nearly 90 percent.
Most hotels in Orange County are in Anaheim, led by the 613-room Westin Anaheim Resort. Anaheim’s construction boom is being fueled by the recent completion of the city’s convention center and Disneyland’s long-awaited new Star Wars theme park, which is set to open this summer.
While all this construction activity points to a record number of hotel openings in 2019, future growth may be slow, analysts say.
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“Lenders are more cautious and somewhat concerned about new supply coming to market and are demanding more capital from developers for larger, full-service hotels,” said Atlas CEO Alan Ray.
“Second, construction costs have increased, including the cost of raw materials and labor. One of the negatives of a strong economy is that labor is limited in terms of finding people to work on your project, so contractors are in high demand to find work. If you don’t stand up today, I think the situation will be very difficult. “
In Southern California, Atlas said more than 90,000 hotel rooms are in various stages of planning, including more than 17,000 in San Diego County, but ultimately only a small fraction of those are likely to move forward.
San Diego-based Cisterra had long planned to build a Ritz Carlton in downtown San Diego, but the $450 million project, which would have included offices, housing and a flea market, was delayed by a union-backed legal challenge. . But that case was settled and Cisterra is now trying to finance the land.
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Cisterra project director Jason Wood said Tuesday that he hopes the project will be funded by the end of this quarter.
Although San Diego County trailed Los Angeles and Orange counties in the new construction category, Southern California led the way in the percentage of hotel openings last year.
The InterContinental in downtown San Diego was among 224 hotel rooms that opened in the area in 2018. That’s a 48 percent increase from 2017. Elsewhere in Southern California, the number of hotel rooms at Atlas fell for the first time in 2018 reported.
Like Ray, San Diego real estate economist Nathan Moder sees signs of cooling in the market for new hotels.
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“Last year there were a lot of hotel completions and starts as the projects were already funded, but in the middle of the year the capital markets started to change because they knew we were reaching the peak of the cycle,” said Moeder of Moeder London advisers. “Then lenders and capital groups are a bit hesitant and cautious about financing new projects.”
However, he says Cisterra, near Petco Park and the Gaslamp Quarter, are high-caliber projects like the Ritz Carlton development.
“If you’re in the best location with the best operator, you have a better chance of getting financing,” he said. “In general, you have to invest more because the banks don’t want to lend more. They will say that we want to limit our exposure, so you, Mr. Developer, should invest more, and the trades are far apart. “
Get ready for your Monday morning inbox with the best San Diego and California business stories of the week. Staff members Ana Quesada, left, and Silvia Tapia, wash windows and do general cleaning to prepare rooms for arriving guests at Cedar House. Sports Hotel May 7, 2020 in Truckee, CA The hotel has been closed since March 16 due to the coronavirus. Cities and counties that rely on tourism are strategizing how to prepare for an influx of out-of-towners when coronavirus restrictions are lifted. (Gary Coronado/Los Angeles Times/TNS) Gary Coronado/TNS
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As California counties move forward with the state’s reopening plan, many began accepting their first visitors as early as March. After three months of sheltering in place, Californians want to get out and rest, if only for a few nights.
Hotels in many areas — San Diego, Napa and El Dorado, to name a few — are preparing to open to outside guests on June 12, not just essential workers. But the threat of COVID-19 has overshadowed the growing tourism and hospitality industry, which caters to large numbers of visitors.
For the foreseeable future, guests should expect the hotel to operate differently than it did before the pandemic and subsequent state shutdowns. To help prepare eager travelers, the Chronicle spoke to hospitality industry insiders about what to expect in hotels and other accommodations this summer.
A: It depends on which phase of California’s four-step reopening plan is in effect in the county you plan to stay in. The state Department of Health is allowing hotels to open June 12 in areas that meet the health criteria for the coronavirus.
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In the Greater Bay Area, Napa, Sonoma, Santa Cruz and Monterey counties are preparing to open hotels to tourists on June 12.
San Francisco hoteliers don’t expect to get the green light until mid-August, said Kevin Carroll, president and CEO of the San Francisco Hotel Council. Until then, the city will only be open to essential workers, people in quarantine, people who cannot stay at home and people in vulnerable areas.
A: Until an effective vaccine is found and widely deployed, it is not 100% safe for public access. That is, hotels will only open for recreation after state and county health officials determine the risk to public health is low enough for them to operate with relative safety.
A: Hotels in California are now required to meet a number of standards and follow best practices set forth by the State of California, industry organizations and company policies. The California Department of Health has released a 15-page report detailing the practices hotels and accommodations are taking to keep guests safe during their stay. These include testing staff and guests for symptoms and providing face coverings to guests who arrive without them.
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The California Hotel and Lodging Association has issued a set of safety standards. They have no-touch checks in pre-packaged envelopes that provide keys and guest information and inform guests of their right to cancel their reservations if they show symptoms of COVID-19.
Many hotels are taking extra precautions to limit the spread of the disease. Marriott Hotels announced in April that it would launch hospital-grade disinfectants powered by electrostatic sprays for use in its hotels, including private rooms.
“While cleanliness is always an issue for hotels, guests can often expect it to be more visible,” said AJ Rossitto, a spokesperson for the association.
This photo, which was not provided by Marriott, shows an employee using electrostatic spray technology to kill germs in the hotel. Hospitality companies are proposing new cleaning standards set by the CDC. . – MARRIOTT; Marriott/New York Times
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A: There is no single standard for cleanliness. However, if an item can be touched, it should be changed or disinfected between occupants, Carroll said. Expect hotels to be transparent and detailed about their cleaning standards.
“It goes both ways,” Carol said. “Guests will expect hotels to know what they’re doing, and you’ll see more hotels communicating their standards.”
State guidelines require hotels to give housekeeping staff more time to adequately clean and disinfect rooms without losing pay. All soiled bed linen and towels must be removed from the rooms afterwards
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